$76m govt debt cripples TelOne

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Operations at fixed telecommunications company, TelOne, are being hampered by government’s failure to pay the parastatal a $76 million debt.

By Kudzai Kuwaza

In a recent presentation to the Parliamentary Portfolio Committee on Information Communication Technology after a tour of the Mazowe Earth Satellite Station, TelOne MD Chipo Mtasa said government and parastatals constitute 59% of the company’s debtors’ book with government constituting 44% and parastatals taking up 15%.

She said the Zimbabwe Revenue Authority has, in turn, charged TelOne interest and penalties amounting to $9,8 million despite government’s indebtedness to the company contributing to the taxman’s arrears. Mtasa said appeals to the taxman and government over the issue have not yielded any response. She revealed to the committee that government debt to the state entity has increased by 26% from $60 million to $76 million with continued requests for the debt to be settled. Mtasa said government’s indebtedness to TelOne has resulted in TelOne failing to settle key liabilities and various statutory and regulatory fees which include Postal and Telecommunications Regulatory Authority of Zimbabwe, pension fund and interconnection obligations.

She said foreign payment arrears have accumulated to US$22 million for services and other obligations. The TelOne MD said the company is in receipt of demand letters from service providers, which include TDM of Mozambique to the tune of US$5,7 million for backhaul services, telecom capital finance (US$1,1 million) for loan repayment, Duraline (US$845 000) for network material and West Indian Ocean Cable Company (US$6,2 million) for internet bandwidth. She warned that TelOne is now facing threats of service disruption and foreign litigation which will be difficult to manage. “Withdrawal of services will result in a standstill of our operations and a major internet blackout for the country,” Mtasa said.

The TelOne boss indicated that there has been a 270% increase in the incidence of network vandalism across the country with 393 cases recorded in 2018 compared to 106 cases in 2017.

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